The Thomas Jefferson Institute’s opposition to President Trump’s tariff regime is now well known. Taxing imports only hurts those the President hopes to help most.
While the President’s recent call to extend tariffs to foreign made films has gotten a lot of press, little attention is being paid to President Trump’s recent threat to impose tariffs on pharmaceutical imports — potentially leading to higher drug prices and disruptions in the drug supply chain.
Tariffs on finished drugs were typically exempt under World Trade Organization agreements, and the US now relies heavily on imported medicines, particularly cheaper generic drugs.
As I wrote today in The Virginian-Pilot:
“The administration surely knows by now that tariffs entail some short-term pain for American consumers. But White House officials believe that’s an acceptable tradeoff, and that consumers can largely avoid the pain by buying American or not making a discretionary purchase at all. But pharmaceuticals are different.”
“In short, no American needs a BMW or a Mercedes, or a six-pack of Guinness or a bottle of Jameson. Putting tariffs on those imported goods might strain consumers’ budgets, but it doesn’t jeopardize anyone’s life.”
“But consumers have far less choice when it comes to their medicines.”
The full impact of a potential tariff on pharmaceuticals is hard to understand until you understand how dependent we are on foreign made medicines and ingredients.
Again, from my article in The Virginian-Pilot:
While half of the medications Americans take are manufactured domestically, we still depend on our allies to fill the gaps. Additionally, the proposed tariffs wouldn’t only tax drugs made in Europe, but also pharmaceutical ingredients that originate there — which constitute roughly one-third of the ingredients in Americans’ medicines.
That means even drugs manufactured in America would see price increases.
While the stated purpose of the Trump tariffs is to return manufacturing to the United States, building a new regulatory compliant pharmaceutical plant can take over a decade. Thus, the tariffs will just punish patients for health conditions for which they did not choose and for which they cannot stop treatment.
President Trump surely wants America to be great. But, taxing imported goods through his aggressive tariff regime only hurts our ability to achieve that goal. And taxing medicines on which many Americans depend, borders on cruel.
Read my full article on Medicine Tariffs in today’s The Virginian-Pilot.
Derrick Max is the President and CEO of the Thomas Jefferson Institute for Public Policy. He can be reached at dmax@thomasjeffersoninst.org.
